This was not how I would have liked to have completed my first full week of 2nd Level Trading. I finished the week down -5.90 R-Units, brining my total since going 100% live to -7.00 R-Units. (If that total drops to -10.00 then I have to drop back down a level & earn my way back up again) I failed to hit my Net Daily Goal a single time this past week and was only profitable 3/5 days.

That’s pretty much all the bad news, now lets figure out what I was able to take away from my first full week of 100% live trading. For starters, I finally have enough data that I can perform some meaningful analysis on with my Trade Tracker Spreadsheet. So that I would have more data-points to work with, I am including all trades that I have made since November 22, which is when I went live.

What makes this week’s statistics so interesting is that I get to see first hand how I traded differently (and unsuccessfully) at Level 2, versus (successfully) at Level 1.

The first point of note is the % of 1-Factor trades that I entered. Of all the trades I entered, 15% of them had only 1 factor. This is actually a lower % than I have historically had. However, the average PnL on my 1 factor trades has nearly doubled to -.74 R-Units/trade as opposed to the historical average of -.41.

As if that change was not bad enough, the average profitability of my 3-factor trades dropped by 85% from .26 R-Unit/trade to .04. For all practical purposes, my 2-factor trades remained the same hovering around break-even.

The second number that sticks out is the 10:00-11:15 mode on my Time Distribution table. Historically speaking, this is the time-slot when I make the majority of my trades, so nothing new there. What is different is the average profitability of the trades during this time-period. The loss is 10x larger than it has ever been! It is hard to have a positive week when your most frequently occurring trade is also your least profitable. Add to that, the fact that your profitable trades are much less profitable than they have been historically and it practically becomes impossible to win.

The final point that I noticed when reviewing all of my trades is how my losses typically lump together. Often-times my worst stretches of losses are precipitated by a good trade that turns out unprofitably. Just like a poker player getting their pocket Aces cracked on the river and subsequently going on tilt, so to do I seem to react after doing everything right in a trade and still losing. At its core, this indicates to me that my trading results and my sense of self are too integrally intertwined and I am thus taking losses personally and subsequently temporarily losing my trading objectivity.

So where does all of this leave me going forward into next week?

For starters, I need to have a better plan for dealing with myself immediately following a loss. Typically, I wait until the end of the day to review all of my trades and while I will continue to do so, I think I should also implement a review of all loosing trades immediately following the closing of the position. Should this analysis reveal anything other than a “Good” trade, then a trading break no shorter than 10-minutes is to be taken. During this time, my focus will be on

A.) Calming my mind & body
B.) Internalizing the lesson of the mistake I just made (ie: visualizing similar market conditions and how I SHOULD have responded versus how I did)
C.) Visualize myself making nothing but 2 & 3-factor trades in a manner similar to ‘B’

I must also be extra-vigilant between the hours of 10:00-11:15am as to not feel compelled to force trades before the doldrums/lunch as is so often the case.

I will then focus more on patiently waiting for opportunities to take more 2tr trades as they were last week, and have been historically, my most profitable type of trade.

And finally there are the 1-factor trades. Hopefully, the above changes will decrease their frequency of occurrence. But if I do find myself in one, there are a couple things I need to change.

1.) If I am fortunate enough to notice that I am in a 1-factor trade at the time, I should close it immediately to minimize the damage as the odds are very high that it will not turn out profitably

2.) Just in general, I need to continue to be very aware of changing market conditions and not be afraid to let go of a position when they change. The doubling of the unprofitability of my 1-factor trades points to my becoming married to a position and unwilling to change direction once in a trade.

# Days at 2nd Level: 9
Consecutive Days Hitting Net Daily Goal: 0
# Days Hitting Goal out of Last 20 (with goal of 16/20) : 2/6
Weekly PnL (Stop = -6.66) : -5.90 R-Units
Total PnL this Level (Stop = -10.00) : -7.00 R-Units